Consumer Packaged Goods Sustainable Packaging: The Consumer Perspective Staverton Park Conference Centre, 16 June 2011

Consumer Packaged Goods

Sustainable Packaging: The Consumer Perspective

Staverton Park Conference Centre, 16 June 2011

Agenda

• Datamonitor’s Consumer Packaged Goods Knowledge Center

• A snapshot of the Datamonitor offering

• Sustainability, packaging and the consumer

• Do consumers really care? If so, to what extent?

• Product trends and packaging concepts

• Sustainable packaging innovation platforms and examples

Strategy & Planning

Consumer & Market Insight

Sales & Marketing

NPD & Innovation

A value proposition to synchronize the way you workThis presentation draws mostly on Datamonitor’s Consumer Insight research

• Assess new or non core categories• Interpret trends quickly• Market sizing/forecasting

• Enhance market positioning

• Better meet consumer needs by understanding consumption locations, and occasions

• Evidence led insight

• Map competitive landscapes globally

• Refine marketing strategies • Protect/grow market/brand

share

• Stimulate ideation and inspiration

• Reduce risk for new product launches and increase the chance of success

Consumer Insight deliverables form the basis of this presentation

© Datamonitor

the home of Business Intelligence

innovative deliveryexpert analysisquality data

© Datamonitor

New Consumer Insight (NCI):

The Future of Sustainable Food and Beverage Packaging (DMCM4767)

DMCM4670, October 2010

Report Slide Pack

2009 – all encompassing• Sustainable Packaging Trends: Consumer

Perspectives and Product Opportunities

2010 – sector specific• The Future of Sustainable Food & Beverage

Packaging• The Future of Sustainable Personal Care

Packaging• The Future of Sustainable Alcoholic Beverage

Packaging • The Future of Sustainable Household &

Laundry Care Packaging

Accessible in multiple formats:• CPG Knowledge Center

– Interactive online report – Full length pdf report– Abridged report ppt. slidepack© Datamonitor

the home of Business Intelligence

innovative deliveryexpert analysisquality data

© Datamonitor

New Consumer Insight (NCI):

The Future of Sustainable Household and Laundry Care Packaging (DMCM4770)

DMCM4770, November 2010

Report Slide Pack

Agenda







Packaging and the ‘sustainability mix’…

NATURAL

Climate change

Biodiversity

NATURAL

Resourcedepletion

HUMAN

SOCIAL

Waste

Population growth

Wealth vs. Poverty

Urbanization Consumption

Democracy

Corruption

Education

Accountability

HealthEmployment

GROWTH

Economic Investment

CSR leadership

Pollution

Regulation

Local Global

New technology

• “Meeting the needs of the present without compromising the ability of future generations to meet theirs”

• About carbon, energy, materials, resources, processes and ecology; but it is also to do with ethics, responsibility/fairness

• Companies vary in interpretation– Some define it very narrowly– Some more broadly – Others lack any corporate definition

TAKEOUT: One of the most public battlegrounds over claims of unsustainable processes centres on waste and, specifically, on packaging

Sustainable packaging is going to exert more influence on your categories of interest

Sustainability is emerging as an industry defining issue for packagers and their customers

Packaging is inherently

environmentally harming

Sustainability emphasis among packagers and

retailers

Escalating consumer

concerns: it influences

choices

Governments and legislation changes are

driving industry change

Widespread environmental concerns are driving the sustainability agenda, including in packaging

79% 82%

Protecting the environment is ‘important’ or ‘very

important’

Source: Datamonitor Consumer Insight Survey, July/August 2010

TAKEOUT: Consumers are engaged by environmental issues and packaging is a now a common target for criticism. It is an important ‘green’ issue…

Feel ‘fairly well’ or ‘very well informed’ about how behavior

impacts the environment

Products that are produced in an eco-friendly way

Products that consume less energy in their production or use

87

90

84

91

81

80

86

82

81

78

73

63

69

54

47

76

70

68

68

63

67

60

57

44

58

45

23

42

35

22

Products that can be recycled or reused

Products that generate less pollution in their production or use

Products that are made of recycled materials

Products that involve less packaging

Products that have a smaller carbon footprintProducts that are made of natural or organic materials

Products that are made of fewer materials

Products that are certified as green

Products that use innovative technology

Products that are not tested on animalsProducts that are made under Fairtrade conditions

Products that are produced locally

Products that are handmade

Country with the highest percentage of respondents who agreed

Country with the lowest percentage of respondents

who agreed

What are green products? (share of respondents who agreed or strongly agreed)

Source: Boston Consulting Group, 2009

TAKEOUT: Sustainable packaging is still understood primarily in terms of its ‘back-end’ environmental impact.

But can be a first step in thinking about broader sustainability practices

Sustainable packaging is a consumer concern

“At times it does feel like

packaging is becoming ‘the villain’, when in reality it is a small player in the overall environmental footprint of the product. However,

viewed through the lens of our consumers, packaging is the first

thing and also the last thing that they experience with our brands.

Therefore if it is important to our consumers, then it is

important to us”

Associate director, sustainability, for Procter &

Gamble’s Global Package and Device Development

60%Grocery products

have too much packaging


Claim would lead to a more favourable perception…

The ‘sustainability advantage’: sustainable packaging credentials can lead to more favorable product evaluation

TAKEOUT: Packaging attributes can provide a positive halo. It can be used to genuinely inspire customers and enhance product/brand allure

REDUCED PACKAGING

57%

55%

RECYCLABLE/COMPOSTABLE

63%

62%

Better than the technology of Coca-Cola. “It's indistinguishable”*

Sustainable packaging ‘one-upmanship’ from highly consumer focused CPG companies…

Already working on the next generation PlantBottle packaging

2011 – World's first PET bottle made entirely from plant-based materials

2009 – First of its kind beverage package made from renewable sources

TAKEOUT: Every little bit means something in a ‘game of perception’. It can help tip the balance, especially when most basic needs have already been met

From oil-based plastics to bio-based plastics

Mainstream brands are bringing critical mass to the sustainable packaging movement

H.J. Heinz Co. will make its ketchup bottles using PlantBottle packaging.

An “industry first partnership”

February 2011

Parallels with how leading/

flagship brands have bought Fairtrade to the mass market

The likes of Cadbury and Nestle embracing Fairtrade through signature

brands has driven segment growth

Since 2009

TAKEOUT: Flagship brands will accelerate consumer awareness/concern

Retailers are in the ‘frontline’ when it comes to discontent about excessive packaging

TAKEOUT: As private label takes centre-stage in retailer strategy, large chains are looking at how packaging can support the marketing efforts

Milk bags represent a 'flagship product' for Sainsbury's as well as helping it to raise

awareness of its environmental credentials

There is a role for both retailers and manufacturers to be ‘ethical lifestyle enablers’: i.e. facilitating people to do things differently and better

28%

Retailers’ ethical policies exerts a ‘high’ or ‘very high’ amount of influence on where one does

MOST grocery shopping

‘Very satisfied’ with my personal efforts to protect

the environment

12%

33% 9%

Grocery retailers have taken a ‘high’ or ‘very high amount of action’ towards being more

environmentally and ethically responsible

11%

16%

TAKEOUT: Enable consumers to reduce environmental footprints by designing and stocking products that meet their core needs, but also conserve resources

Source: Datamonitor Consumer Insight Surveys, April/May 2009; July/August 2010; Datamonitor Green Consumer Survey, June 2010

Consumers are more sensitive to sustainable packaging issues and perceive grocery products to be over-packaged

68% 71% 52%

Agree that grocery products are over-packaged…

TAKEOUT: High frequency packaging use and disposal = increasing consumer awareness. Strive for a lower packaging to product ratio as a minimum


Groceryproducts

Food & beverages

Beauty products

67%

60% 48%

54% 51% 30%

32%46%

16%

18%

Household care/laundry

Alcoholic drinks

TAKEOUT: Influenced by visibility: the cycle of consumption through to disposal is typically more pronounced for food and beverages than other CPGs

Food and beverage products are perceived to be more over-packaged than most other FMCG items


http://takeoutwithout.com/

Heightened sensitivity to the environmental impact of packaging is influencing consumer behaviour

37%

If I see a product has too much packaging I will consider buying an alternative product…

36%37%


37%

‘Highly’ or ‘very highly attentive’ towards whether packaging is environmentally friendly…

35%40%

40%

49%

TAKEOUT: Environmentally conscious consumers want to purchase high-integrity products in packaging reflecting their desire to ‘do their bit’

But the ‘really engaged’ segment is still comparably small…

18%

Highly influenced by the amount of packaging when choosing packaged food products…(June 2010)

21%19%

Source: Datamonitor Consumer Insight Surveys, June, 2010; April/May 2009

17%

Reduced packaging exerts a ‘high’ or ‘’very high’ degree of influence when making food and beverage choices…(April/May 2009)

27%26%

TAKEOUT: There is no guarantee that large segments will consistently choose more ‘virtuous products’. This is also influenced by awareness gaps

How much does the amount of packaging influence your choice of product in these categories? (share of global respondents)

8

7

8

7

21

20

21

15

18

19

18

20

17

16

16

24

Packaged food products

Household cleaning/ laundry products

Personal care/ beauty products

Alcoholic beverages

Very high amount of influence High amount of influence

Low amount of influence Very low amount of influence

…with little variance by sector

TAKEOUT: They are buying the product not the packaging. Standalone messages that packaging has been improved or reduced are not enough

Source: Datamonitor Green Consumer Survey, June 2010

TAKEOUT: But it must not be at the expense of the core consumption experience, just as Frito-Lay discovered in 2010. Improved sustainability benefits

MUST co-exist with other core functionality that consumers value

SUNCHIPS (US): Environmental benefits

compromised the consumption experience!

Don’t forget the bigger picture about how consumers talk about, and interact with, packaging

TAKEOUT: Multi-faceted expectations; consumers value packaging solutions that are practical, stylish, safe and environmentally responsible

Source: Hartman Group/Datamonitor

Environmental considerations are not a primary driver of packaging preference

TAKEOUT: Sustainability as a secondary consideration is apparent even when considering the ‘packaging mix’ more broadly. Consumers may buy brands with

'green' packaging, but ultimately they are persuaded by other factors

26

28

21

22

16

18

18

18

14

16

11

9

41

35

41

39

36

34

33

31

34

32

26

21

Preserving freshness (e.g. resealable)

Ingredient information

Clear instructions how to use the product

As an indication of product quality

Ease of storage

Protecting the product

Ease of opening

Whether it is environmentally friendly

Ease of carrying/transporting the item

Information about how product was manufactured

Distinctive or recognizable design

Fashionable/unique design

Very high amount of attention High amount of attention

In general, how much attention do you pay towards the following packaging functions/ benefits when choosing grocery products? (share of global respondents)


Sustainable packaging concerns align well with consumers’ desire to ‘de-clutter’ = practical value too!

57% of consumers believe that,

as a society, we need to consumer a lot less to improve the environment for

future generations

63% of consumers of

consumers perceived that living a less complicated lifestyle has become more important to them in the previous two

years.

Packaging which is more sustainable, due to being less excessive and less draining on resources, can be

a part of this important de-cluttering process.

Additionally, with consumers becoming more engaged by the sustainable packaging/waste debate,

the environmental impact of consumer lifestyles is becoming a point of personal reflection. Consumers will not sacrifice their standard of living, but they will

begin to feel more negatively towards and responsible for wasteful consumption and that which does not

contribute to a sense of a better quality of life.

49% of Americans, according to

a Harris Interactive Poll between July and September 2009, embrace

environmentally friendly behaviours out of a desire to reduce clutter in their

home

59% 54% 65% 59% 57% 56%

Source: Datamonitor Consumer Insight Survey, July/August 2010; National Geographic/Globescan ‘Greendex’, 2010

On a related note, be alert to the “damned if you do, damned if you don’t” reality

TAKEOUT: It’s going to feel at times like you cant win!

Reduced packaging in grocery products may

compromise product quality

20% 37% 37%

CONSUMER AMBIVALENCE


Wasteful packaging Deficient packaging

• Packaging is an important green issue

• Think products are over packaged

• Take for granted functional roles

• Fails to protect = the reason not to buy!

INHERENTLY NEGATIVE PERCEPTIONS

Final thoughts regarding consumers and sustainable packaging…

Don’t overlook the issue,

tempting as it might be

• Sure, it’s rarely a primary purchase motivator BUT…• Packaging and packaging communications are the first and

last impression consumers have of many brands today• They think products are over packaged; not a good start!• The evident ‘value-action gap’ will be driven by lack of

awareness, rather than a lack of intent

Think of the ‘sustainability

marketing advantage’

• Sustainable packaging is a claim that can be physically substantiated, rather than other more dubious sustainability claims that still exist

• Ensure that improved sustainability benefits co-exist with other functionality that consumers value

• Don’t just meet consumer expectations; exceed them • Elevates the importance of sustainability in the packaging

‘mix’. Elevates the importance of packaging in the sustainability mix

Ultimately it is a journey: you must demonstrate how you are becoming progressively better over time

Stonyfield Farm takes website users through

the “sustainable packaging journey”,

highlighting the incremental

steps taken over 20 years as well

as what the future might

hold

NEXT: Andrew is now going to take you on an ‘innovation journey’ (after coffee)Consumer opinion ideas? Please share with me…

Source: www.stonyfield.com

Agenda







Documents

Consumer Packaged Goods Sustainable Packaging: The Consumer Perspective Staverton Park Conference Centre, 16 June 2011